KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh has called for immediate measures to protect Pakistan’s trade and industrial sector from the impact of volatile global oil prices, warning that rising energy and transportation costs are threatening export competitiveness and industrial activity.
Sheikh said repeated international oil shocks, combined with high domestic levies, were putting additional pressure on Pakistan’s macroeconomic stability, widening the trade deficit and increasing the risk of industrial closures.
Export industries facing rising costs
According to the FPCCI president, higher prices of high-speed diesel (HSD) and furnace oil are increasing inland transportation, logistics, electricity generation and manufacturing costs.
He said the resulting increase in freight and supply-chain expenses was eroding the already narrow profit margins of exporters and making it harder for Pakistani businesses to compete for international orders.
Sheikh called for a dedicated safety net for export-oriented industries, arguing that passing the full impact of higher global oil prices onto manufacturers could undermine production and foreign exchange earnings.
FPCCI seeks PDL relief for exporters
The FPCCI has proposed an immediate suspension of the Petroleum Development Levy (PDL) for export-oriented manufacturing as a targeted measure to provide industries with financial relief.
Sheikh said such support could help exporters absorb part of the external cost shock while protecting Pakistan’s foreign exchange-generating sectors.
The business body also called for a faster transition toward alternative and renewable energy sources, alongside broader rationalization of electricity and gas tariffs.
According to Sheikh, bringing energy costs closer to those faced by industrial competitors in Bangladesh, Vietnam and India would help Pakistani manufacturers remain competitive.
Call for lower interest rates
The FPCCI president also urged the central bank to accelerate reductions in the policy rate, saying lower borrowing costs were needed to provide affordable working capital to businesses facing mounting operational expenses.
He particularly highlighted the vulnerability of small and medium-sized enterprises (SMEs), which play a key role in Pakistan’s export supply chains but have less financial capacity than large corporations.
Sheikh warned that without targeted support, rising costs and liquidity constraints could lead to factory closures, reduced production shifts and increased unemployment.